5% GST at restaurants from today: Why your food bill may still not change

1. Business Standard 5% GST at restaurants from today: Why your food bill may still not change AC restaurants and non-AC restaurants will charge 5% GST, down from 18% and 12% respectively Eating out at restaurants may get cheaper as GST Council's decision to lower the tax rate to a uniform five per cent from 12 per cent on non-AC restaurants and 18 per cent on air-conditioned ones comes into effect on Wednesday.

2. Currently, air-conditioned restaurants levy a charge of 18 per cent on food bill and non-AC restaurants levy 12 per cent tax. ALSO READ: Icra hails 5% GST rate on AC, non-AC restaurants The council said the restaurants did not pass on the input tax credit (ITC) to customers and so the ITC facility is being withdrawn and a uniform five per cent tax is levied on all restaurants without the distinction of AC or non-AC. Restaurants in starred-hotels that charge Rs 7,500 or more per day room tariff will be levied 18 per cent GST but ITC is allowed for them. Those restaurants in hotels charging less than Rs 7,500 room tariff will charge five per cent GST but will not get ITC. ALSO READ: Select hotel & restaurant shares gain on GST rate change Menu prices: According to a report by Scroll, restaurant owners have been mulling a price rise on their menu. This is because of the high rent they have to pay at expensive locations, loss of input tax credit and competition from big eateries. Several restaurant owners are not convinced that a lower tax will make up for the loss of input tax……read more